By Matt Johnson
When I heard about the anti-renewables report that the Texas Comptroller, Susan Combs, published on September 23, I thought it might be a long and arduous read, well supplied with solid facts, figures, and a methodology only energy geeks would salivate over to criticize. After all, it’s the Comptroller’s Office, right? You’d expect a solidly-researched report replete with thorough analyses based on solid data. It’s nothing like that. It’s 16 pages comprised almost entirely of bullet points and infographics that a staffer with an agenda would find all-too-easy to pluck out of context for his/her boss to use against renewables during the next session.
It deservedly received a prompt rebuke from the wind and solar industries, as well as environmental groups. Combs also received harsh criticism from Railroad Commissioner Barry Smitherman, no great environmentalist but a key factor in the build out of the Competitive Renewable Energy Zones – huge transmission projects approved by the Legislature and the PUC which allowed a significant expansion in West Texas’s wind energy to make it back east.
Solar’s Response
Of the official statements reviewed so far, the Texas Solar Power Association’s comments were almost Canadian-esque in their politeness. Beginning with the areas of agreement, such as the need for reliable and affordable energy in a growing state, heat being a factor that negatively affects power plants that rely on cool water to operate, and the need for new generation, TSPA did eventually take the Comptroller to task for misleading statements.
Anyone who read the report and wasn’t an energy wonk might be left thinking all renewables are heavily subsidized and taxpayers don’t get a good value from them. TSPA rightly schooled the Comptroller on the differences between incentives. “The primary incentive related to solar generation comes from the federal government rather than the State of Texas and is called the “Investment Tax Credit” (ITC). The ITC provides investors in solar projects with a tax credit of 30% of the value of their investment, thereby reducing taxes paid by the investor to the federal government and allowing those dollars to remain in Texas. No Texas tax dollars are spent on the ITC, and no solar incentive exists at any level that subsidizes electricity sold into the competitive market.”
In perhaps the most vivid example exposing Combs’ chicanery, the TSPA and the Wind Coalition statements cite the Comptroller’s previous reports to refute this report on just what level of subsidies the energy industry has received and from where they came.
“Using data from the Comptroller’s last “apples to apples” comparison, the following table shows annual levels for federal, state and local incentives related to electricity generation:”
Wind’s Response
Wind Coalition Executive Director Jeffrey Clark’s letter to Combs made some delicious digs, but it is also full of information on what the Comptroller’s report failed to include in the report entitled Texas Power Challenge: Getting the Most from Your Energy Dollars.
First, the delicious digs:
- “While billed as a discussion on reliability and cost, “Texas Power Challenge” is so transparently biased that I object to its publication under the official auspices of the Office of the Comptroller.”
- “[The report’s] publication as a “research” document has done an [sic] tremendous disservice to the agency’s excellent research staff which has long been correctly viewed as authoritative, scholarly, and unbiased.”
- “[I]t is a compendium of outdated or erroneous messages promoted by organizations funded by wind’s competitors as they work to undermine the growth of wind energy.”
Clark pointed out: “Just a few years ago, your own report (The Energy Report – 2008) estimated federal subsidies for various forms of energy and reported that wind received only 3.4% of 2006 federal support. In the same report, you also presented data showing that the oil and gas industry in Texas received 99.6% of state and local incentives. To quote, “The Comptroller’s Office also compiled an estimate of state and local energy subsidies for 2006. In Texas, state and local subsidies totaled $1.4 billion in 2006. Oil and gas garnered most of the subsidies with an estimated 99.6 percent.” In the absence of comprehensive tax reform, little has changed since that time and wind’s competitors continue to reap billions in subsidies every year.”
In addition to the Comptroller’s own reports, Clark also pointed out that the Public Utility Commission of Texas is on record as acknowledging wind’s positive effect on electric prices: “Wind generation has had the impact of reducing wholesale and retail prices of electricity.”
Smitherman’s Response
Speaking of the PUC, former Chairman Barry Smitherman (now Railroad Commissioner) sounded off on the Combs report’s characterization of the new CREZ transmission lines.
“This latest report treats CREZ lines as if they are some alternative species of transmission. They’re not. They’re transmission lines. They are just like all the other transmission lines that we have built in ERCOT (Electric Reliability Council of Texas),” Smitherman said. “They are paid for in the same way. To somehow suggest that these are different, that they’re just for wind, is really misleading.”
In an interview with the Texas Energy Report, Smitherman noted that CREZ lines can carry any type of power generation, they play a role in ERCOT’s resource adequacy needs, and CREZ legislation passed in 2005 to help diversify power sources as natural gas prices skyrocketed, leaving some policymakers wondering if Texas had made a huge mistake in deregulating its electric market. The story noted that Smitherman said CREZ “turned out to be a needed expansion of the state’s transmission infrastructure... The only thing that distinguished CREZ from other transmission projects was the state did not have to find a need to build it.”
“In an odd twist of fate, these lines are becoming very important for the oil and gas industry. I’ve superimposed the CREZ projects on our oil and gas drilling maps. You can see that we have built these lines throughout the most prolific portions of West Texas and the Panhandle,” he said.
Environmental Defense Fund’s Response
The Environmental Defense Fund’s Marita Mirzatuny also provided a summation of criticisms for Forbes, and added that this report comes just after PUC Commissioner Donna Nelson opened a docket to review planning and system costs related to renewables. The topic “has garnered a number of comments, and a commission workshop is set for October 30. The overarching consensus – from fossil generators to renewable companies alike – is don’t open that can of worms! Nobody wants to start allocating transmission costs per specific resource. And if that was to happen, there is a chance the cumbersome fossil fuel plants that require more maintenance, fuel, and water may end up paying more to deliver electricity.”
Attack on Austin
Finally, there were the stale attacks on Austin. Despite having among the lowest electric rates in the state year after year, Combs isolated Austin Energy’s 100 MW biomass plant in Nacogdoches and the recent Affordable Energy Resolution adopted by City Council as examples of renewables costing too much. She failed to note that while recent increases in the Power Supply Adjustment were partially due to the higher costs of the biomass plant, the PSA was actually lowered by recent record-setting wind contracts that saved Austin Energy consumers money.
Oddly enough, the report did mention the recent 150 MW PPA Austin Energy signed with Recurrent Energy this year for a historically low 5 cents/kWh, adding the caveat that it is still higher than AE’s average energy cost. Yet, the report also includes an infographic depicting solar PV’s estimated levelized cost of electricity at $107/MWh, which is 10.7 cents/kWh, more than twice as much as the Recurrent deal Austin signed earlier in 2014.
Whatever the motivations were for publishing it, the Comptroller’s “report” is a dud, filled with inaccuracies, misleading statements, and statistics taken out of context. Although reading the reactions to it and learning just how bad its arguments are has been fun, the sad part is that it is likely to be shoved to the periphery of public attention for a few months, then cited as the official report it technically is in legislative deliberations on critical energy issues next year. It doesn’t have to be that way though. We must all remember that all “reports”, even official ones, are not of the same quality.